Economy returned to the negative tranche after two years

During January of this year, national production contracted 1.12%, the first negative figure after 22 months, according to the monthly report of the National Institute of Statistics and Informatics (INEI).

Economic activity was affected in the first month of 2023 by the fall in sectors such as construction (-11.70%), telecommunications and others (-9.26%), financial and insurance (-5.95%), mining and hydrocarbons (-3.61%) and transport and storage (-2.94%).

The result comes as a result of the prolonged sociopolitical tension and the rejection of the citizenry to the Dina Boluarte regime in search of a constituent assembly, for which reason “the cooling of January should not be surprising”, since the slowdown had been observed since the year past, according to the director of Phase Consultores, Juan Carlos Odar.

“We are in the process of normalizing activities, such as telecommunications and finance, that grew with the pandemic, in addition to construction. Now we see that it is normalizing, ”he added to The Republic.

battered construction

Along these lines, we can see that construction had the most pronounced decline in January and, according to the economist, this is due to the increase in interest rates from the Central Reserve Bank of Peru (BCRP), despite the increase in public investment .

According to INEI, the drop in internal cement consumption (-15.12%) is due to the lower construction of private works and self-construction, aggravated by the blockade of roads in some regions, which resulted in the cancellation of projects and suspension of Labor journeys.

“The private part of the building gets cold. Mortgage credit becomes more expensive and caution and risk perception is greater. It is difficult to think that in this context people think about a mortgage loan and get into debt, which has repercussions on the construction sector, ”he said.

be more realistic

The Ministry of Economy and Finance (MEF) expects GDP to grow 3.1% this year, without considering the ravages of the rains due to the climate emergency and the financial panic that arose in the United States with the bankruptcy of Silicon Valley Bank.

Odar held that the MEF It has been very optimistic since before these problems, and recommended that its estimates be revised downward, despite showing that “things have not necessarily been said well.”

For its part, BBVA Research estimates that the rest of the year will be challenging, since business confidence remains negative and uncertainty persists regarding the advancement of presidential elections, which, together with a possible phenomenon of El Niño Costero, would make GDP will grow 2.5% this year, even with a possible downward revision in the coming days.

Advance of 0% in the first quarter

From January to March, the economy will continue with a positive annual performance, but close to 0%, since the rains and political tension, as well as external factors, will continue to hit investment expectations, Odar predicts.

In interannual terms from February last year to January this year, national production rose 2.35%, led by the lodging and restaurant sector (21.02%). Although the red figures persist in areas such as mining and hydrocarbons, manufacturing, financial and insurance.“The drop in indirect tax collection (-4.82%) exceeds productive activity.”

Evolution of the Monthly Index of National Production: January 2023